Newcastle Council chiefs defend £27m cost of scheme

NEWCASTLE council chiefs are insisting that a £27m programme to save money is producing results.

NEWCASTLE council chiefs are insisting that a £27m programme to save money is producing results.

The city council’s “corporate transformation programme” is designed to save £169m over the next five years by axing 510 posts.

The scheme’s costs include £13m in redundancy payments and £9.5m in associated pension costs – £3.9m more than expected.

Some 285 staff agreed to leave voluntarily, with the average redundancy payout being £45,600.

Hiring consultants cost £2.3m, while £2.2m went on the council’s corporate transformation team, according to minutes of a recent meeting of the council’s executive committee.

Councillor Peter Allen, executive member for resources, said: “When you get rid of staff, you have got a lot of years’ service.

“That’s what it costs. What distorts it is what goes into the pension fund.”

He added that the programme would produce savings of £18m this year and £169m over five years, protecting council services and taxpayers amid uncertainty about Government funding.

Regional Minister and Newcastle MP Nick Brown accused the Liberal Democrat-run council of spending large amounts of public money to “buy” their way out of problems.

“There isn’t any national decision that will affect the local budget of Newcastle City Council, at least as far as this exercise is concerned. It is a mess of their own making,” said the Labour MP.

Kenny Bell, the Unison union branch secretary at the council, said: “We are not happy but we are having to live within a very strict financial regime.”

He also warned that the public sector faced the “most vicious” cuts programme after the General Election next year, whoever came to power, and that Unison was mounting a national campaign to fight that danger.


David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer